Table Of ContentPUBLIC FINANCE IN A CHANGING WORLD
Also by Peter Birch S¢rensen
TAX POLICY IN THE NORDIC COUNTRIES (editor)
Public Finance in a
Changing World
Edited by
Peter Birch S0rensen
Professor of Economics
University of Copenhagen
Denmark
Editorial matter, selection and Introduction © Peter Birch Sf(lrensen 1998
Chapters 1-10 (inclusive) © Macmillan Press Ltd 1998
Softcover reprint of the hardcover 1st edition 1998 978-0-333-68221-0
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07 06 05 04 03 02 01 00 99
Contents
List of Tables vii
List of Figures viii
Preface ix
Acknowledgements x
Notes on the Contributors xi
Public Finance in a Changing World: Introduction and Summary
Peter Birch S~rensen
Part I Alternative Perceptions of Government
1 The Role of the State in Fiscal Theory
Richard A. Musgrave 35
2 Government Role and the Efficiency of Policy Instruments
Vito Tanzi 51
Part II The Welfare State, Entrepreneurship and Employment
3 Social Insurance, Incentives and Risk-Taking
Hans-Werner Sinn 73
4 Unemployment in the United States: The Problem and a
Proposal
Robert Haveman 101
5 Unemployment and Public Finance in Europe
Frederick van der Ploeg 126
v
vi Contents
Part III Public Finance with Many Jurisdictions
6 Factor Mobility and Redistributive Policy
David E. Wildasin 151
7 Theory and Practice of Confederate Finances 193
Dubravko Mihaljek
8 Reform and Coordination of Company Taxes in the European
Union
Sijbren Cnossen 221
Part IV Economies in Transition: Raising Revenue and
Allocating Property Rights
9 Tax Reform in Transition Economies: Experiences from the
Croatian Tax Reform Process of the 1990s
Manfred Rose and RolfWiswesser 257
10 The Sales Policy of the Treuhandanstalt as a Privatization
Strategy
Gerlinde Sinn 279
Index 297
List of Tables
2.1 The growth of general government expenditure, 1870-1994 54
2.2 The size of revenue from financial repression 61
2.3 Seigniorage revenue in 26 developing countries, 1984 62
2.4 Tax revenue from implicit financial taxation in selected
countries, 1971-86 averages 63
4.1 Net new jobs created in ten countries, 1979-93 102
4.2 Unemployment rates in the United States, by age and race 104
4.3 Percentage allocation of males aged 18-64 across
work-pattern categories, 1973-92 104
4.4 Variance of logarithm (VLN) of earnings, 1973-91, male
workers aged 18-64 107
4.5 Expenditures by government on education, training and
employment, and social services/other, United States,
1970-92 112
5.1 DECO unemployment rates, 1993 129
5.2 DECO sectoral trends in employment growth, 1979-90 130
5.3 Unemployment benefit replacement rates by duration, 1991 139
5.4 Number of unemployed per staff member in employment
offices and related services, 1992 141
8.1 European Union taxes on company earnings in 1996 224
8.2 Tax rates on labour and capital income in the Nordic countries 241
vii
List of Figures
3.1 Private insurance versus social insurance 77
3.2 Risk productivity, ideal insurance and redistributive taxation 84
3.3 Moral hazard 89
3.4 The excessive welfare state 90
3.5 The redistributive paradox 92
3.6 The optimal tax problem 95
3.7 Optimal taxation and the redistributive paradox 96
4.1 Changes in earnings across the earnings distribution,
year-round, full-time male workers aged 25-64, 1973-93 106
4.2 Changes in earnings across the earnings distribution,
year-round, full-time female workers aged 25-64, 1973-93 107
4.3 Real hourly wages for men, by level of education, 1973 and
1993 108
4.4 Earnings of cohorts of men aged 25-34, by education,
1975-90 109
4.5 Poverty in the United States, 1959-94 111
4.6 Public expenditures on labour market programmes, as
a percentage of GDP 114
6.1 Attainable distribution of income with migration 159
6.2 Fiscal transfers and migration with and without mobility costs 173
9.1 Determination of the personal allowance in the Croatian
income tax system 273
viii
Preface
This volume brings together a selection of papers which were originally
presented at the 51st Congress of the International Institute of Public
Finance on 'The Changing Role of the Public Sector: Transitions in the
1990s', held at Universidade Nova in Lisbon in August 1995.
All papers were subsequently refereed and edited for publication. As
editor, I am grateful to the many anonymous referees who helped seeing
the papers through to the final stage.
Copenhagen
PETER BIRCH S0RENSEN
ix
